High Streets

Debate between John Pugh and Brian H. Donohoe

Wednesday 16th October 2013 Commons Chamber

[John Pugh (Southport) (LD)]

I want to start in consensual mode by congratulating the tablers of the motion and the hon. Member for Rochdale (Simon Danczuk) on putting business rates firmly on the agenda.

I have had many discussions about the high street with traders and experts such as landlords and agents. I serve on the Communities and Local Government Committee, as does the hon. Gentleman. We have interviewed Mary Portas, civil servants, and Ministers of all shapes and sizes. We have talked about the threat of the internet, the perennial problem of parking, out-of-town shopping, pop-up shops, council policy and the like, but again and again we get back to business rates, which make it hard for businesses to start in the high street and hard for them to survive when the going gets tough.

The Federation of Small Businesses has raised this issue, as have the retail sector bodies. They are concerned not only about the actual rate but, as the hon. Member for Sefton Central (Bill Esterson) said, about the problems of revaluation and appeals against current valuations, which take an inordinate amount of time. When I raised revaluation during Business, Innovation and Skills questions not long ago, I think in the previous Session, the Minister, the right hon. Member for Sevenoaks (Michael Fallon), said, more or less—I paraphrase—“Be careful what you wish for: they may go up.” I cannot help thinking that he lives in a parallel universe or does not visit the high street all that often.

Fortunately, that is only part of the Government’s policy; other aspects have been outlined. I very much support the move to localise business rates. I like the continuation of support for the previous Government’s policy of business improvement districts. We are getting one in Southport and I hope it will be very successful. It certainly promises much and is well organised at the moment. However, they do not provide a reduction in business rates, and that is what is now required. I understand that in the latest spending round the Business Secretary considered moving on, or reducing, high street rateable values.

[Mr Donohoe]

The rates for a small restaurant in the shopping mall in my area are £30,000, but the mall owner has put the rent at £30,000 as well, so the overall cost—not just the rates—is impacting on the business, which has to make £60,000 a year before it can start to make a profit.

[John Pugh]

The problem, as the hon. Gentleman will be aware, is very specific. If we give a discount or make any kind of reduction to high street retail rates, will that include the whole retail sector and the out-of town sector? If we give it to the high street, will we also want to give it to Tesco Express? The Government have to face up to those legitimate problems.

As the hon. Member for Northampton South (Mr Binley) said, very little money is being made on the high street at present, and the amount of money that was made in the past will never be made again. The big chains recognise that and are altering their retail model. They have reduced their high street presence and will not come back in the same numbers. Ultimately, we cannot ignore that issue, but we cannot address it locally.

In some way or another, we must look to the Government to come up with a solution. That will involve the Department for Communities and Local Government, which, judging from its comments so far, is relatively sympathetic; the Department for Business, Innovation and Skills, which is broadly sympathetic, unless it is lobbied hard by the big traders; and, specifically, the Treasury, which can be fairly unbending on this subject. The Minister needs to set up a cross-departmental meeting that involves the retail sectors, joins up the initiatives—not the silly ones, such as those centred on parking on double yellow lines—and takes action on rates. If the Minister does that, I think he will become the hero of the high street. The high street can get more savvy with the web, diversify more, hold more events and extend or vary its hours, but with the albatross of business rates around its neck it simply cannot thrive.